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M&S to close 60 stores amid clothing and homewares decline

UK retailer M&S has announced it is to close around 60 stores nationwide as it attempts to reverse declines in its clothing and homewares business.

In its half year results, announced this morning, M&S said that underlying profits for the half were down by 18% in comparison to last year as a result of sales in its clothing and home business plummeting by 5%.

Overall UK like-for-like sales were down 3% for the retailer with a further 1% decline in international sales.

As a result, M&S has said it plans to close around 60 of its UK stores as it embarks on a rebalancing of its estate with an increased focus on its Simply Food stores, despite also seeing a 0.9% decline in its food business.

The exact stores facing closure are yet to be revealed but the firm said that the move would actually result in an increase in its overall UK estate, with new food outlets offsetting the closure of its traditional home and clothing stores.

In a statement, Steve Rowe, M&S Chief Executive Officer conceded that ‘tough decisions’ had to made to ensure the brand remained competitive.

He said: “We have now completed a forensic review of our estate both in the UK and in our International markets. Over the next five years we will transform our UK estate with c.60 fewer Clothing & Home stores, whilst continuing to increase the number of our Simply Food stores.

“In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer.”

Today’s announcement to the stock exchange also revealed that M&S intends to scale back its international business, which currently operates at an annual loss of £45m, and instead focus on its franchising model for overseas markets.

It said that it intended to withdraw from ten markets where it directly owned stores, including the closure of ten outlets in China and all its stores in Belgium, Netherlands, Poland and a smattering of other European countries.

The closures, which M&S anticipates will cost around £150-£200m, are set to put 2,100 overseas jobs at risk.

“Internationally, we propose to cease trading in ten loss making owned markets, but intend to continue to develop our presence through our strong franchise partners,” added Rowe.

“These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.”

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